The Constitutional Court of the Republic of Belarus, comprising of the Presiding Officer - Chairman of the Constitutional Court G.A. Vasilevich, Deputy Chairman A.V. Maryskin, judges T.S. Boiko, K.I. Kenik, V.V. Podgrusha, A.G. Tikovenko, R.I. Filipchik, G.B. Shishko, V.Z. Shuklin, has examined on the grounds of Article 40, part one of Article 116 of the Constitution of the Republic of Belarus of the complaint concerning definition of the notion of income from unlawful entrepreneur activities which is specified in point 6 of Resolution of Plenum of the Supreme Court of the Republic of Belarus of 28 June 2001 No. 6 "On judicial practice on the cases of unlawful entrepreneur activities".

     Having analyzed the provisions of the Criminal Code and the Civil Code, tax legislation and other enforceable legal acts of the Republic of Belarus, the Constitutional Court found the following.

     In accordance with part one of Article 11 of the Criminal Code of the Republic of Belarus (hereafter also referred to as CC) a crime shall be the committed guilty socially dangerous deed (action or inactivity) which is characterized by the features envisaged by the given Code and which is banned by that Code under the threat of punishment.

     According to part one of Article 233 of CC unlawful entrepreneur activities shall be recognized as a crime, if those activities entail earning the income in a big amount. Part two of the given Article shall envisage heightened liability for unlawful entrepreneur activities which entail earning the income in an extra big amount.

     The note to Chapter 25 of CC which specifies liability for the crimes against the procedure of carrying out economic activities to which unlawful entrepreneur activities shall be also referred and which stipulates what shall be a big amount and an extra big amount of the income. However, there is no specification of the notion of income itself, its composition and the way of its calculation in the criminal law.

     There is also no definition of the notion "income" in the Administrative Code of the Republic of Belarus and Article 154 of that Code shall establish administrative responsibility for the violation of the rules for carrying out entrepreneur activities.

     The Constitutional Court emphasizes that the notion of income shall be also contained in other acts of legislation. However, there is a notion defined in different ways depending on the purposes it shall be used for.

     Thus, according to the Law "On income tax from natural persons" for the purposes of that Law the income tax from a natural person shall be any obtained (calculated) money resources and material assets (Article 2). At the same time, by taxation of income from entrepreneur activities where the income from those activities in accordance with part one of point 2 of Article 14 of the given Law shall be determined as the difference between proceeds (in cash and in kind) of realization of products (goods, works, services), other assets, income from out-of-realization transactions and vouched expenses connected with the income-making. At the same time, point 5 of the given Article shall specify that, if an entrepreneur may not vouch his expenses connected with the income-making from entrepreneur activities, the exemption of expenses from the proceeds shall be at the rate of 10 per cent of the proceeds.

     According to the Law "On income taxes and profit taxes" taxable profit shall be calculated based on the balance profit which is the sum of profits from realization of products, goods (works, services), other assets, property rights and income from out-of-realization transactions reduced up to the sum of expenses under those transactions (part one of point 2 of Article 2). While determining the profit from realization of goods there shall be taken the costs due to practically realized goods (part three of point 2 of Article 2).

     In accordance with the Law "On measures for prevention of legalization of fraudulent gains", which shall establish the system of measures for prevention of legalization of fraudulent gains, those fraudulent gains shall be - money (currency of the Republic of Belarus and foreign currency), securities, other property, property rights included, exclusive rights to the results of intellectual activities obtained following the violation of the legislation (point 1 of part one of Article 2). Decree of the President of the Republic of Belarus of 23 December 1999 No. 43 "On taxation of income earned in certain spheres of activities" the object of taxation for credit and financial establishments and insurance organizations shall be the sum of income earned in tax period; for other legal entities which carry out transactions with securities, - the total sum of income from realization (redemption) of securities in tax period (sub-point 1.2 of point 1). In sub-item 1.3 of point 1 of the specified Decree taxable base shall be specified by credit and financial establishments as the total sum of income earned in tax period reduced up to the sum of expenses, which are referred thereto in accordance with the legislation of the Republic of Belarus to the cost of product (works, services) taking into account the peculiarities of the composition of spendings included in the expenses for carrying out bank activities, as well as of income from out-of- realization transactions reduced up to the sum of expenses, which are referred to in accordance with the legislation of the Republic of Belarus to the cost of product (works, services) taking into account the peculiarities of the composition of spendings included in the expenses of those organizations, and income from out-of-realization transactions reduced up to the sum of expenses under those transactions; by other legal entities which carry out transactions with securities, - as a difference between the price of realization (redemption) of securities in tax period and the price of their acquisition with the expenses for acquisition and realization taking into account.

     Part two of point 1 of Article 1 of the Civil Code shall specify that one of the components of the notion "entrepreneur activities" is direction of the activities to the systematic profit-making.

     In the opinion of the Constitutional Court, the composition of income and the procedure of its specification shall be significant for determination of the nature and degree of social danger of unlawful entrepreneur activities which are found to be criminal.

     The Constitutional Court pays attention to the fact that CC, as applied to Article 233 establishing liability for unlawful entrepreneur activities, shall specify no composition of income and the procedure of its calculation.

     For the purposes of qualification of unlawful entrepreneur activities as a criminal action the notion of income shall be specified by Ruling of Plenum of the Supreme Court of the Republic of Belarus of 28 June 2001 No. 6 "On judicial practice on the cases of unlawful entrepreneur activities". Point 6 of the given Ruling has explained that "income from unlawful entrepreneur activities shall mean all the sum of proceeds in cash and in kind without the expenses for the receipt of the proceeds. Income in kind is subject to specification in money terms."

     By giving its explanations on the issue of what one shall understand as the income from unlawful entrepreneur activities, Plenum of the Supreme Court has practically given the notion of income under which those activities resulted in making income in a big amount or in an extra big amount shall be found to be a crime. In the opinion of the Constitutional Court, Plenum of the Supreme Court had acted as the lawmaker.

     Under Article 49 of the Law "On judicial system and status of judges in the Republic of Belarus" Plenum of the Supreme Court is authorized to examine the materials of generalization of judicial practice and judicial statistics, as well as to give the courts of law explanations on the issues of application of the legislation of the Republic of Belarus arising as a result of examination of judicial cases.

     The Criminal Code shall be the sole criminal law which is effective in the territory of the Republic of Belarus (part two of Article 1 of CC). Provisions of part two of Article 3 of CC shall stipulate that no one may be found guilty in commitment of a crime and to be subject to criminal liability precisely under the court verdict and in accordance with the law; the punishability and other criminal legal consequences shall be specified by CC only; norms of CC shall be subject to strict interpretation; it is inadmissible to apply the criminal law by analogy.

     The Constitution enshrines that interpretation of the laws shall be under the authority of the National Assembly of the Republic of Belarus (Articles 97 and 98).

     In accordance with part one of Article 70 of the Law "On enforceable legal acts of the Republic of Belarus" in instance of finding indistinctness and differences in the content of an enforceable legal act, as well as contradictions in the practice of its application the law creating body (official) who and which adopted (issued) that act or unless otherwise envisaged by the Constitution of the Republic of Belarus, the body authorized by the law creating body (official) shall give official interpretation of those norms by way of adoption (issue) of the relevant enforceable legal act.

     According to Article 72 of the specified Law, while revealing the gaps in the enforceable legal acts, the law creating bodies (officials) who and which adopted (issued) those acts are binding to make into them the relevant alterations and addenda for elimination from the gaps (part one); application of the institutes of the analogy of law and analogy of the right shall be prohibited in instances of calling to criminal and to administrative liability (part three).

     The Constitutional Court emphasizes that for the purposes of unique and exact application of the terms used in CC only the lawmaker shall have the right to define the notion "income" as regards unlawful entrepreneur activities, and as for the other crimes against the procedure of carrying out economic activities.

     Based on the above-stated the Constitutional Court deems that definition of the notion "income" as regards unlawful entrepreneur activities should not be contained in the Ruling of Plenum of the Supreme Court, but in the Criminal Code or shall be revealed by way of interpretation of that notion as applied to the criminal legal relations by the legislative body.

     Guided by Article 40, part one of Article 116 of the Constitution, Articles 7, 11, 36, 38, 40, 40¹ of the Law "On the Constitutional Court of the Republic of Belarus" the Constitutional Court

RULED:

1. To note the necessity of definition of the notion "income" for the purposes of qualification of crimes against the procedure for carrying out economic activities directly in the Criminal Code of the Republic of Belarus or by way of giving the relevant interpretation by the legislative body and that shall encourage the forming of single judicial practice based on the law.

2. To propose the National Assembly of the Republic of Belarus to adopt the law in accordance with the present Decision.

3. The present Decision shall come into legal force from the date of its adoption.

4. To publish the present Decision in accordance with the legislation.

Presiding Officer —

Chairman of the Constitutional Court

of the Republic of Belarus                                                                                               G.A. Vasilevich